The bottom of the Internet pipeline

Tom CampbellNC Spin

February 5, 2013

According to the Federal Communications Commission, North Carolina finds itself in the unenviable position of being at the bottom, tied with Mississippi, for having the lowest number of households with basic broadband connections. Too many homes and businesses are stuck with outdated cable and DSL networks because of a lack of competition.

High-speed broadband requires a huge capital investment, costing a million dollars or more per mile of fiber optic cable. Small private-sector companies neither have that capital nor the ability to withstand competition from the large, out-of-state corporations that comprise almost all the players in this broadband field and big companies don’t compete against each other in this virtual monopoly arena.

Neither are these companies investing in and improving their networks at the same pace as they do in states where there is more competition. Wilson, Davidson, Salisbury and Morganton tired of asking providers for high-speed Internet throughout their corporate limits and decided to build their own systems. Not only did these municipal systems improve the speed but also saved customers as much as $250 per year. Customers benefitted from the competition and fled the slower, more expensive provider in favor of the community owned networks, prompting the cable company to improve service and lower their prices in Wilson. To stop the spread of this practice the big companies lobbied to prevent more municipalities from getting into broadband service on the grounds municipalities were able to borrow money at cheaper rates, they were too inept and the public sector should not be in competition with the private sector.

House Bill 129, passed by the legislature in 2011, prohibited municipalities from building community owned networks. It was pay-to-play politics at its worst as big companies like Time-Warner, AT&T, Embarq and CenturyLink reportedly contributed more than $1 million in campaign contributions to legislators. The big corporate providers got the bill passed and North Carolinians got higher prices, fewer jobs created and slower services.

While generally true that the public sector should not compete with the private sector there must be some exceptions when the private sector cannot or will not provide needed services at competitive prices. Let us remember the first electric service in most towns came from municipally owned power plants and today municipalities provide most water and sewer systems, fire, rescue and police protection.

Governor McCrory has often said high-speed broadband service is part of our infrastructure, like roads, bridges, water and sewer and public buildings. We need to greatly improve our state’s infrastructure, especially ensuring high-speed broadband service. The Internet now plays a major role in our economy and it grows daily as businesses become more dependent on it. Citizens are increasingly turning to the Internet for news, communication, shopping and research. And one reason why many public schools cannot convert to the new technologies of laptop computers and online software is because so many communities do not have high-speed Internet with access for students to do homework and research, putting them at a competitive disadvantage.

This is another example that bigger is not better. We owe it to our citizens to remove barriers, improve speed and service, lower prices and improve competitive broadband services. We cannot afford to be at the bottom of the Internet pipeline.

Campbell is the creator and host of NC Spin, a weekly panel discussion on state politics that airs on PBS and a former assistant treasurer for the N.C. Department of Revenue.